Genesis, an industry pioneer and leader in digital currency prime brokerage services, today released its Q3 2020 Digital Asset Market Report. The report showcases Genesis’ record-breaking quarter — with more than $5.2B in new originations, $2.1B active loans outstanding at the end of the quarter, and $1.0B in bilateral derivatives trading volume — along with trend analysis from the company’s lending, spot, and derivatives trading desks.
The new report’s key performance highlights include:
Quarter-over-quarter loan originations continue to grow at an exponential rate. Genesis’ more than $5.2B in new originations during Q3 marks the firm’s largest quarter ever and is more than double the previous record set in Q2. Cumulative originations increased 61.5% from the prior quarter, bringing total originations to $13.6B since Genesis launched its lending business in March 2018.
Active loans outstanding increased approximately 50% quarter-over-quarter from $1.4B in Q2 2020 to $2.1B at the end of Q3.
Institutional lenders continue to flock to Genesis. At the end of Q3, the number of unique lenders had increased 47% from the previous quarter-end and 275% from last year.
Bitcoin as a percentage of loans outstanding fell sharply in Q3 compared to Q2. However, the overall size of Genesis’ loan portfolio increased dramatically. This dynamic was driven by increased activity in ETH, USD and equivalents, along with other altcoins – an impact of liquidity mining on DeFi protocols.
Genesis’ recently launched derivatives desk saw rapid growth. The firm saw a total bilateral derivatives volume (across bilateral options, forwards and exchange-cleared blocks) of $1.0B in Q3 — a 150% increase from a partial Q2 period when the derivatives trading desk was launched. This uptick in volume comes largely as a result of a rapid uptake in option structures for hedging and the firm’s lending franchise opening to the door to bilateral credit relationships.
“This quarter, Genesis’ growth was largely driven by activity from institutional investors and other trading firms,” said Michael Moro, CEO of Genesis. “We saw tremendous growth in the number of unique institutional lenders on the Genesis platform and, perhaps most interestingly, experienced a spike in the number of trading firms lending cash to us against Bitcoin collateral. These sophisticated investors are continuing to find novel ways to incorporate digital assets into their overall strategies, which is a key indicator of a maturing marketplace.”
Additionally, the firm officially launched its Genesis Custody service in Q3 — a fast platform focused on meeting the needs of sophisticated investors across an expanding list of jurisdictions. At launch, Genesis serviced Bitcoin, Bitcoin Cash, Litecoin, Ethereum, Ethereum Classic, MANA, ZCash, Horizen, XRP, and XLM. The firm plans to add new assets on a monthly basis.
To read the full Q3 2020 Digital Asset Market Report, click here. Additionally, follow these links for more information about Genesis’ recent launch of a derivatives trading desk and transformation into a digital asset prime brokerage.
Genesis is a wholly owned subsidiary of Digital Currency Group. In addition to Genesis, DCG is the parent company of Grayscale Investments, the world’s largest digital currency asset manager, and CoinDesk, a leading media and events company.
Genesis is a full-service digital currency prime brokerage that provides a single point of access for global high net worth and institutional investors. The firm provides sophisticated market participants with a fully-integrated platform to trade spot, futures, options, borrow, lend and custody digital assets, creating new opportunities for yield while increasing capital efficiency for our counterparties.
Built on the only global over-the-counter trading firm for digital assets registered with the SEC and FINRA, Genesis combines unrivaled operational excellence, a seamless user experience, and best-in-class client service to provide the full suite of asset services global investors require for their digital asset portfolios.
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